JEFFERSON CITY, Mo. – Democratic Gov. Jay Nixon said Missouri will need to adapt to Internet-based companies like Tesla Motors, as his administration faces a lawsuit by the Missouri Auto Dealers Association trying to block them from selling their automobiles in the state
Nixon said all he has seen about the industry’s lawsuit is what he has “seen in the newspapers, which is not a significant amount.” Their lawsuit alleges the state’s Department of Revenue was violating the state’s franchise law by allowing Tesla to sell.
“I think the legislature didn’t move on those restrictions last year, and so we’ll let this litigation play out,” he said, pointing to a late-session effort by the industry to change the state’s law.
“As we move forward, I think you’re going to continue to see more and more people accessing consumer products through sales on the internet,” he said. “I haven’t had a chance to look at the litigation, but you’re seeing a lot more transactions move to the internet and I expect that to continue.”
Doug Smith, president of the dealers’ association, said the Nixon administrations support of Tesla is bad for the jobs tied to the state’s auto industry.
“Buying a car online is not innovative. Consumers have been able to purchase vehicles online for over a decade,” he said. “The Department of Revenue and Gov. Nixon are pushing a business model that doesn’t support Missouri jobs, businesses or its middle class families.”
Smith said new car sales boost funding for “things like the state’s road fund, new job training and education,” and that sales tax revenue associated with them stays in local communities.
Missouri has had its auto franchise laws in place since the 1980’s. At the time, they were established to protect small auto dealers to compete. The idea was rooted in the economic idea that more competition means lower prices.
Missouri’s franchise law explicitly bars manufacturers from competing directly with their franchisers. Currently, there are no Tesla franchises in Missouri. Instead, they have set up one station in St. Louis and are planning to put in another later this year in Kansas City.